General Dynamics Land Systems-Canada, a business unit of General Dynamics (GD), was awarded a $41.5 million contract for spare parts for the RG-31 Mk5E vehicles under the Mine Resistant Ambush Protected (MRAP) vehicle program. The contract was awarded by the U.S. Marine Corps Systems Command (MCSC).
General Dynamics’ Combat Systems performance was affected in fiscal 2009 due to lower volume on the group’s mine-resistant, ambush-protected (MRAP) vehicle deliveries. However growth in the MRAP program is essential as MRAP and Abrams programs are the significant driver of the segment’s earnings growth in the U.S. military vehicle business.
General Dynamics’ Combat Systems segmental order backlog was $13.4 billion at the end of fiscal 2009, compared to $15 billion at year-end 2008. Decline in the segmental backlog is attributable to the Army’s termination of the manned ground vehicle portion of the Future Combat Systems (FCS) program.
Total backlog was $65.5 billion at fiscal-end 2009, reflecting an increase mainly in both the Aerospace and Combat Systems segments.
General Dynamics Land Systems-Canada, located at London in Ontario, Canada, is a business unit of General Dynamics Land Systems of Sterling Heights, Michigan. General Dynamics, headquartered in Falls Church, Virginia, is a market leader in business aviation; land and expeditionary combat systems, armaments and munitions; shipbuilding and marine systems; and information systems and technologies.
General Dynamics is likely to continue to deliver on expectations driven by strong revenue growth, margin expansion and cash flow generation. Strong defense outlays should improve the outlook for shareholders while an increasingly-funded backlog and an improving balance sheet are additional positives. The Zacks Consensus Estimate on the company’s earnings for the first quarter is currently pegged at $1.56 per share.
“GD” Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research
